US stocks traded higher on Thursday, with the S&P 500 notching a new record as data showed the US economy near full recovery, boosted by a trifecta of the stimulus spending, vaccine rollouts, and a widening reopening. Growth in the quarter pushed economic activity nearly back to pre-pandemic levels.
The median estimate called for an expansion of 6.7% over the three-month period, according to economists surveyed by Bloomberg. The jump follows a 4.3% expansion in the fourth quarter of 2020.
“This is a meaningful acceleration of economic activity, as the faster-than-expected vaccine rollout appeared to begin the process of unlocking pent-up consumer demand, despite supply chain and weather-related disruptions,” Michael Reynolds, investment strategy officer at Glenmede, said in a note Thursday.
Major indexes were already up pre-market before the 8:30 a.m. ET announcement thanks to blockbuster earnings from tech giants Apple and Facebook. Investors were also digesting the major speech delivered by President Joe Biden on his taxing and spending plans Wednesday evening.
The 10-year U.S. Treasury yield rose after the GDP announcement and is now headed for its biggest weekly increase since March 5. The yield on the benchmark note climbed to 1.67%. Yields move inversely to prices.
“Investors moved back into the global recovery trade overnight as the Federal Reserve stayed “on message” and was suitably dovish at its latest FOMC meeting,” Jeffrey Halley, Asia Pacific senior market analyst at OANDA, said in a note Thursday.
He continued: “While the Fed was suitably dovish, there were a few subtle changes to the language of the FOMC statement and in Chairman Powell’s post-meeting remarks. Notably, the language of the FOMC wound back its risk assessment from the pandemic and acknowledged a strengthening of the labor market.”
Here’s where US indexes stood at the 9:30 a.m. ET open on Thursday:
Earnings continue to roll in. Facebookrose 7% Thursday after reporting blockbuster first-quarter earnings that beat Wall Street analyst estimates. The social media giant posted a 48% jump in quarterly revenue to $26.17 billion. Net income grew 94% to $9.5 billion, or $3.30 per share – up from $4.9 billion, or $1.71 per share, a year ago.
Applesurged as much as 3% after its second-quarter earnings report smashed analyst expectations. The Cupertino, California-based company reported a record non-holiday quarter driven by strong iPhone 12 sales, with revenue growing 54% year-over-year. Apple also increased its dividend by 7% and raised its stock buyback program to $90 billion.
Indian food-delivery firm Zomato plans to raise up to $1.1 billion via an initial public offering in what would be the country’s largest stock-market listing this year. The startup is backed by billionaire Jack Ma’s Ant Group and Uber.
Cryptocurrency prices have been mixed. Bitcoin continues to trend below the $60,000-level after peaking to its record high in mid-April but Anthony Scaramucci’s SkyBridge Partners said investors should hold on and not sweat over the wild volatility. Ether hit a new peak, inching closer to the $2,800-level.
Oil markets ignored a rise in official US Crude Inventories, rallying even after the dovish FOMC meeting. West Texas Intermediate crude was up 2.16%, to $65.24 per barrel. Brent crude, oil’s international benchmark, rose 2.23%, to $68.77 per barrel.